1     
CLEAN FUEL CONVERSION AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Stephen G. Handy

5     
Senate Sponsor: Todd Weiler

6     

7     LONG TITLE
8     General Description:
9          This bill amends the Conversion to Alternative Fuel Grant Program.
10     Highlighted Provisions:
11          This bill:
12          ▸     creates the Conversion to Alternative Fuel Grant Program Fund;
13          ▸     authorizes the Department of Environmental Quality to make grants from the
14     Conversion to Alternative Fuel Grant Program Fund to a person who installs
15     conversion equipment on an eligible vehicle;
16          ▸     repeals tax credits for conversion equipment for vehicles; and
17          ▸     makes technical changes.
18     Money Appropriated in this Bill:
19          This bill appropriates:
20          ▸     to the Conversion to Alternative Fuel Grant Program Fund, as a one-time
21     appropriation:
22               •     from the General Fund, $150,000.
23     Other Special Clauses:
24          This bill provides a special effective date.
25     Utah Code Sections Affected:
26     AMENDS:
27          19-1-403, as last amended by Laws of Utah 2015, Chapter 381
28          19-2-302, as enacted by Laws of Utah 2015, Chapter 381
29          19-2-303, as enacted by Laws of Utah 2015, Chapter 381
30          19-2-304, as enacted by Laws of Utah 2015, Chapter 381
31          59-7-605, as last amended by Laws of Utah 2015, Chapters 381 and 439
32          59-10-1009, as last amended by Laws of Utah 2015, Chapters 381 and 439
33          63I-2-219, as last amended by Laws of Utah 2015, Chapter 258
34     ENACTS:
35          19-1-403.3, Utah Code Annotated 1953
36     

37     Be it enacted by the Legislature of the state of Utah:
38          Section 1. Section 19-1-403 is amended to read:
39          19-1-403. Clean Fuels and Vehicle Technology Fund -- Contents -- Loans or
40     grants made with fund money.
41          (1) (a) There is created a revolving fund known as the Clean Fuels and Vehicle
42     Technology Fund.
43          (b) The fund consists of:
44          (i) appropriations to the fund;
45          (ii) other public and private contributions made under Subsection (1)(c);
46          (iii) interest earnings on cash balances; and
47          (iv) all money collected for loan repayments and interest on loans.
48          (c) The department may accept contributions from other public and private sources for
49     deposit into the fund.
50          (2) (a) The department may make a loan or a grant with money available in the fund
51     for:
52          (i) [for] the conversion of a private sector business vehicle or a government vehicle to
53     use a clean fuel, if certified by the Air Quality Board under Subsection 19-1-405(1)(a); or
54          (ii) [for] the purchase of an OEM vehicle for use as a private sector business vehicle or
55     government vehicle[; or].
56          [(iii) to a person who installs conversion equipment on an eligible vehicle, as described
57     in Sections 19-2-301 through 19-2-304.]
58          (b) The amount of a loan for any vehicle under Subsection (2)(a) may not exceed:
59          (i) the actual cost of the vehicle conversion;
60          (ii) the incremental cost of purchasing the OEM vehicle; or
61          (iii) the cost of purchasing the OEM vehicle if there is no documented incremental
62     cost.
63          (c) The amount of a grant for any vehicle under Subsection (2)(a) may not exceed:
64          (i) 50% of the actual cost of the vehicle conversion minus the amount of any tax credit
65     claimed under Section 59-7-605 or 59-10-1009 for the vehicle for which a grant is requested;
66     or
67          (ii) 50% of the incremental cost of purchasing an OEM vehicle minus the amount of
68     any tax credit claimed under Section 59-7-605 or 59-10-1009 for the vehicle for which a grant
69     is requested.
70          (d) (i) Subject to the availability of money in the fund, the department may make a loan
71     or grant for the purchase of vehicle refueling equipment for a private sector business vehicle or
72     a government vehicle.
73          (ii) The maximum amount loaned or granted per installation of refueling equipment
74     may not exceed the actual cost of the refueling equipment.
75          (3) The department may:
76          (a) establish an application fee for a loan or grant from the fund by following the
77     procedures and requirements of Section 63J-1-504; and
78          (b) reimburse itself for the costs incurred in administering the fund from:
79          (i) the fund; or
80          (ii) application fees established under Subsection (3)(a).
81          (4) (a) The fund balance may not exceed $10,000,000.
82          (b) Interest on cash balances and repayment of loans in excess of the amount necessary
83     to maintain the fund balance at $10,000,000 shall be deposited in the General Fund.
84          (5) (a) Loans made from money in the fund shall be supported by loan documents
85     evidencing the intent of the borrower to repay the loan.
86          (b) The original loan documents shall be filed with the Division of Finance and a copy
87     shall be filed with the department.
88          Section 2. Section 19-1-403.3 is enacted to read:
89          19-1-403.3. Conversion to Alternative Fuel Grant Program Fund -- Contents --
90     Grants made with fund money.
91          (1) (a) There is created an expendable special revenue fund known as the Conversion
92     to Alternative Fuel Grant Program Fund.
93          (b) The fund consists of:
94          (i) appropriations to the fund;
95          (ii) other public and private contributions made under Subsection (1)(c);
96          (iii) fees established by the department, as described in Subsection (3)(a), and
97     deposited into the fund; and
98          (iv) interest earnings on cash balances.
99          (c) The department may accept contributions from other public and private sources for
100     deposit into the fund.
101          (2) The department may make a grant with money available in the fund to a person
102     who installs conversion equipment on an eligible vehicle, as described in Sections 19-2-301
103     through 19-2-304.
104          (3) The department may:
105          (a) establish an application fee for a grant from the fund by following the procedures
106     and requirements of Section 63J-1-504; and
107          (b) reimburse itself for the costs incurred in administering the fund from:
108          (i) the fund; or
109          (ii) application fees established under Subsection (3)(a).
110          (4) (a) The fund balance may not exceed $10,000,000.
111          (b) Interest on cash balances in excess of the amount necessary to maintain the fund
112     balance at $10,000,000 shall be deposited into the General Fund.
113          Section 3. Section 19-2-302 is amended to read:
114          19-2-302. Definitions.
115          As used in this part:
116          (1) "Air quality standards" means vehicle emission standards equal to or greater than
117     the standards established in bin 4 in Table S04-1 of 40 C.F.R. 86.1811-04(c)(6).
118          (2) "Alternative fuel" means:
119          (a) propane, natural gas, or electricity; or
120          (b) other fuel that the board determines, by rule, to be:
121          (i) at least as effective in reducing air pollution as the fuels listed in Subsection (2)(a);
122     or
123          (ii) substantially more effective in reducing air pollution as the fuel for which the
124     engine was originally designed.
125          (3) "Board" means the Air Quality Board.
126          (4) "Clean fuel grant" means a grant awarded under [Title 19, Chapter 1, Part 4, Clean
127     Fuels and Vehicle Technology Program Act,] this part from the Conversion to Alternative Fuel
128     Grant Program Fund created in Section 19-1-403.3 for reimbursement for a portion of the
129     incremental cost of an OEM vehicle or the cost of conversion equipment.
130          (5) "Conversion equipment" means equipment designed to:
131          (a) allow an eligible vehicle to operate on an alternative fuel; and
132          (b) reduce an eligible vehicle's emissions of regulated pollutants, as demonstrated by:
133          (i) certification of the conversion equipment by the Environmental Protection Agency
134     or by a state or country that has certification standards that are recognized, by rule, by the
135     board;
136          (ii) testing the eligible vehicle, before and after the installation of the equipment, in
137     accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-Use Highway
138     Vehicles and Engines, using all fuel the motor vehicle is capable of using;
139          (iii) for a retrofit natural gas vehicle that is retrofit in accordance with Section
140     19-1-406, satisfying the emission standards described in Section 19-1-406; or
141          (iv) any other test or standard recognized by board rule, made in accordance with Title
142     63G, Chapter 3, Utah Administrative Rulemaking Act.
143          (6) "Cost" means the total reasonable cost of a conversion kit and the paid labor, if any,
144     required to install it.
145          (7) "Director" means the director of the Division of Air Quality.
146          (8) "Division" means the Division of Air Quality, created in Subsection 19-1-105(1)(a).
147          (9) "Eligible vehicle" means a:
148          (a) commercial vehicle, as defined in Section 41-1a-102;
149          (b) farm tractor, as defined in Section 41-1a-102; or
150          (c) motor vehicle, as defined in Section 41-1a-102.
151          Section 4. Section 19-2-303 is amended to read:
152          19-2-303. Grants and programs -- Conditions.
153          (1) The director may make grants from the Conversion to Alternative Fuel Grant
154     Program Fund created in Section 19-1-403.3 to a person who installs conversion equipment on
155     an eligible vehicle as described in this part.
156          (2) A person who installs conversion equipment on an eligible vehicle:
157          (a) may apply to the division for a grant to offset the cost of installation; and
158          (b) shall pass along any savings on the cost of conversion equipment to the owner of
159     the eligible vehicle being converted in the amount of grant money received.
160          (3) As a condition for receiving the grant, a person who installs conversion equipment
161     shall agree to:
162          (a) provide information to the division about the eligible vehicle to be converted with
163     the grant proceeds;
164          (b) allow inspections by the division to ensure compliance with the terms of the grant;
165     and
166          (c) comply with the conditions for the grant.
167          (4) A grant issued under this section may not exceed the lesser of 50% of the cost of
168     the conversion system and associated labor, or $2,500, per converted eligible vehicle.
169          Section 5. Section 19-2-304 is amended to read:
170          19-2-304. Duties and authorities -- Rulemaking.
171          (1) The board may, by following the procedures and requirements of Title 63G,
172     Chapter 3, Utah Administrative Rulemaking Act, make rules:
173          (a) specifying the amount of money to be dedicated annually for grants under this part;
174          (b) specifying criteria the director shall consider in prioritizing and awarding grants,
175     including a limitation on the types of vehicles that are eligible for funds;
176          (c) specifying the minimum qualifications of a person who:
177          (i) installs conversion equipment on an eligible vehicle; and
178          (ii) receives a grant from the division;
179          (d) specifying the terms of a grant; and
180          (e) requiring all grant applicants to apply on forms provided by the division.
181          (2) The division shall:
182          (a) administer [funds] the Conversion to Alternative Fuel Grant Program Fund to
183     encourage eligible vehicle owners to reduce emissions from eligible vehicles; and
184          (b) provide information about which conversion technology meets the requirements of
185     this part.
186          (3) The division may inspect vehicles for which a grant was made to ensure
187     compliance with the terms of the grant.
188          Section 6. Section 59-7-605 is amended to read:
189          59-7-605. Definitions -- Tax credits related to energy efficient vehicles.
190          (1) As used in this section:
191          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
192     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
193          (b) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
194     Conservation Act.
195          [(c) "Certified by the board" means that:]
196          [(i) a motor vehicle on which conversion equipment has been installed meets the
197     following criteria:]
198          [(A) before the installation of conversion equipment, the vehicle does not exceed the
199     emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
200     Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
201     and]
202          [(B) as a result of the installation of conversion equipment on the motor vehicle, the
203     motor vehicle has reduced emissions; or]
204          [(ii) special mobile equipment on which conversion equipment has been installed has
205     reduced emissions.]
206          [(d) "Clean fuel grant" means a grant awarded:]
207          [(i) under Title 19, Chapter 1, Part 4, Clean Fuels and Vehicle Technology Program
208     Act, for reimbursement of a portion of the incremental cost of an OEM vehicle or the cost of
209     conversion equipment; or]
210          [(ii) under Title 19, Chapter 2, Part 3, Conversion to Alternative Fuel Grant Program.]
211          [(e) "Conversion equipment" means equipment described in Subsection (2)(d) or (e).]
212          [(f)] (c) "OEM vehicle" [has] means the same [meaning] as that term is defined in
213     Section 19-1-402.
214          [(g)] (d) "Original purchase" means the purchase of a vehicle that has never been titled
215     or registered and has been driven less than 7,500 miles.
216          [(h)] (e) "Qualifying electric motorcycle" means a vehicle that:
217          (i) has a seat or saddle for the use of the rider;
218          (ii) is designed to travel with not more than three wheels in contact with the ground;
219          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
220          (iv) is not fueled by natural gas;
221          (v) is fueled by electricity only; and
222          (vi) is an OEM vehicle except that the vehicle is fueled by a fuel described in
223     Subsection (1)[(h)](e)(v).
224          [(i)] (f) "Qualifying electric vehicle" means a vehicle that:
225          (i) meets air quality standards;
226          (ii) is not fueled by natural gas;
227          (iii) [is fueled by electricity only] draws propulsion energy from a battery with at least
228     10 kilowatt hours of capacity; and
229          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
230     Subsection (1)[(i)](f)(iii).
231          [(j)] (g) "Qualifying plug-in hybrid vehicle" means a vehicle that:
232          (i) meets air quality standards;
233          (ii) is not fueled by natural gas or propane;
234          (iii) has a battery capacity that meets or exceeds the battery capacity described in
235     Section 30D(b)(3), Internal Revenue Code; and
236          (iv) is fueled by a combination of electricity and:
237          (A) diesel fuel;
238          (B) gasoline; or
239          (C) a mixture of gasoline and ethanol.
240          [(k) "Reduced emissions" means:]
241          [(i) for purposes of a motor vehicle on which conversion equipment has been installed,
242     that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in
243     Subsection (2)(e)(i) or (ii), is less than the emissions were before the installation of the
244     conversion equipment, as demonstrated by:]
245          [(A) certification of the conversion equipment by the federal Environmental Protection
246     Agency or by a state that has certification standards recognized by the board;]
247          [(B) testing the motor vehicle, before and after installation of the conversion
248     equipment, in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use
249     Highway Vehicles and Engines, using all fuel the motor vehicle is capable of using;]
250          [(C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
251     19-1-406, testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
252     emission standards applicable under Section 19-1-406; or]
253          [(D) any other test or standard recognized by board rule, made in accordance with Title
254     63G, Chapter 3, Utah Administrative Rulemaking Act; or]
255          [(ii) for purposes of special mobile equipment on which conversion equipment has
256     been installed, that the special mobile equipment's emissions of regulated pollutants, when
257     operating on a fuel listed in Subsection (2)(e)(i) or (ii), is less than the emissions were before
258     the installation of conversion equipment, as demonstrated by:]
259          [(A) certification of the conversion equipment by the federal Environmental Protection
260     Agency or by a state that has certification standards recognized by the board; or]
261          [(B) any other test or standard recognized by board rule, made in accordance with Title
262     63G, Chapter 3, Utah Administrative Rulemaking Act.]
263          [(l) "Special mobile equipment":]
264          [(i) means any mobile equipment or vehicle that is not designed or used primarily for
265     the transportation of persons or property; and]
266          [(ii) includes construction or maintenance equipment.]
267          (2) For the taxable years beginning on or after January 1, 2015, but beginning on or
268     before December 31, 2016, a taxpayer may claim a tax credit against tax otherwise due under
269     this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay
270     Corporate Franchise or Income Tax Act, in an amount equal to:
271          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
272     this state, the lesser of:
273          (A) $1,500; or
274          (B) 35% of the purchase price of the vehicle; or
275          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
276     registered in this state, $1,000;
277          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
278     registered in this state, the lesser of:
279          (i) $1,500; or
280          (ii) 35% of the purchase price of the vehicle;
281          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
282     this state, the lesser of:
283          (i) $750; or
284          (ii) 35% of the purchase price of the vehicle; and
285          [(d) 50% of the cost of equipment for conversion, if certified by the board, of a motor
286     vehicle registered in this state minus the amount of any clean fuel grant received, up to a
287     maximum tax credit of $1,500 per motor vehicle, if the motor vehicle is to:]
288          [(i) be fueled by propane, natural gas, or electricity;]
289          [(ii) be fueled by other fuel the board determines annually on or before July 1 to be at
290     least as effective in reducing air pollution as fuels under Subsection (2)(d)(i); or]
291          [(iii) meet the federal clean-fuel vehicle standards in the federal Clean Air Act
292     Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.;]
293          [(e) 50% of the cost of equipment for conversion, if certified by the board, of a special
294     mobile equipment engine minus the amount of any clean fuel grant received, up to a maximum
295     tax credit of $1,000 per special mobile equipment engine, if the special mobile equipment is to
296     be fueled by:]
297          [(i) propane, natural gas, or electricity; or]
298          [(ii) other fuel the board determines annually on or before July 1 to be:]
299          [(A) at least as effective in reducing air pollution as the fuels under Subsection
300     (2)(e)(i); or]
301          [(B) substantially more effective in reducing air pollution than the fuel for which the
302     engine was originally designed; and]
303          [(f)] (d) for a lease of a vehicle described in Subsection (2)(a), (b), or (c), an amount
304     equal to the product of:
305          (i) the amount of tax credit the taxpayer would otherwise qualify to claim under
306     Subsection (2)(a), (b), or (c) had the taxpayer purchased the vehicle, except that the purchase
307     price described in Subsection (2)(a)(i)(B), (2)(b)(ii), or (2)(c)(ii) is considered to be the value
308     of the vehicle at the beginning of the lease; and
309          (ii) a percentage calculated by:
310          (A) determining the difference between the value of the vehicle at the beginning of the
311     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
312     stated in the lease agreement; and
313          (B) dividing the difference determined under Subsection (2)[(f)](d)(ii)(A) by the value
314     of the vehicle at the beginning of the lease, as stated in the lease agreement.
315          (3) (a) The board shall:
316          (i) determine the amount of tax credit a taxpayer is allowed under this section; and
317          (ii) provide the taxpayer with a written certification of the amount of tax credit the
318     taxpayer is allowed under this section.
319          (b) A taxpayer shall provide proof of the purchase or lease of an item for which a tax
320     credit is allowed under this section by:
321          (i) providing proof to the board in the form the board requires by rule;
322          (ii) receiving a written statement from the board acknowledging receipt of the proof;
323     and
324          (iii) retaining the written statement described in Subsection (3)(b)(ii).
325          (c) A taxpayer shall retain the written certification described in Subsection (3)(a)(ii).
326          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
327     only:
328          (a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
329     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year
330     by the taxpayer;
331          (b) for the taxable year in which a vehicle described in Subsection (2)(a), (b), or (c) is
332     purchased[,] or a vehicle described in Subsection (2)(f) is leased[, or conversion equipment
333     described in Subsection (2)(d) or (e) is installed]; and
334          (c) once per vehicle.
335          (5) A taxpayer may not assign a tax credit under this section to another person.
336          (6) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
337     taxpayer's tax liability under this chapter or Chapter 8, Gross Receipts Tax on Certain
338     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, for a taxable year,
339     the amount of the tax credit exceeding the tax liability may be carried forward for a period that
340     does not exceed the next five taxable years.
341          (7) In accordance with any rules prescribed by the commission under Subsection (8),
342     the commission shall transfer at least annually from the General Fund into the Education Fund
343     the amount by which the amount of tax credit claimed under this section for a taxable year
344     exceeds $500,000.
345          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
346     commission may make rules for making a transfer from the General Fund into the Education
347     Fund as required by Subsection (7).
348          Section 7. Section 59-10-1009 is amended to read:
349          59-10-1009. Definitions -- Tax credits related to energy efficient vehicles.
350          (1) As used in this section:
351          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
352     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
353          (b) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
354     Conservation Act.
355          [(c) "Certified by the board" means that:]
356          [(i) a motor vehicle on which conversion equipment has been installed meets the
357     following criteria:]
358          [(A) before the installation of conversion equipment, the vehicle does not exceed the
359     emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
360     Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
361     and]
362          [(B) as a result of the installation of conversion equipment on the motor vehicle, the
363     motor vehicle has reduced emissions; or]
364          [(ii) special mobile equipment on which conversion equipment has been installed has
365     reduced emissions.]
366          [(d) "Clean fuel grant" means a grant a claimant, estate, or trust receives under Title 19,
367     Chapter 1, Part 4, Clean Fuels and Vehicle Technology Program Act or Title 19, Chapter 2,
368     Part 3, Conversion to Alternative Fuel Grant Program, for reimbursement of a portion of the
369     incremental cost of the OEM vehicle or the cost of conversion equipment.]
370          [(e) "Conversion equipment" means equipment described in Subsection (2)(d) or (e).]
371          [(f)] (c) "OEM vehicle" [has] means the same [meaning] as that term is defined in
372     Section 19-1-402.
373          [(g)] (d) "Original purchase" means the purchase of a vehicle that has never been titled
374     or registered and has been driven less than 7,500 miles.
375          [(h)] (e) "Qualifying electric motorcycle" means a vehicle that:
376          (i) has a seat or saddle for the use of the rider;
377          (ii) is designed to travel with not more than three wheels in contact with the ground;
378          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
379          (iv) is not fueled by natural gas;
380          (v) is fueled by electricity only; and
381          (vi) is an OEM vehicle except that the vehicle is fueled by a fuel described in
382     Subsection (1)[(h)](e)(v).
383          [(i)] (f) "Qualifying electric vehicle" means a vehicle that:
384          (i) meets air quality standards;
385          (ii) is not fueled by natural gas;
386          (iii) [is fueled by electricity only] draws propulsion energy from a battery with at least
387     10 kilowatt hours of capacity; and
388          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
389     Subsection (1)[(i)](f)(iii).
390          [(j)] (g) "Qualifying plug-in hybrid vehicle" means a vehicle that:
391          (i) meets air quality standards;
392          (ii) is not fueled by natural gas or propane;
393          (iii) has a battery capacity that meets or exceeds the battery capacity described in
394     Section 30D(b)(3), Internal Revenue Code; and
395          (iv) is fueled by a combination of electricity and:
396          (A) diesel fuel;
397          (B) gasoline; or
398          (C) a mixture of gasoline and ethanol.
399          [(k) "Reduced emissions" means:]
400          [(i) for purposes of a motor vehicle on which conversion equipment has been installed,
401     that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in
402     Subsection (2)(e)(i) or (ii), is less than the emissions were before the installation of the
403     conversion equipment, as demonstrated by:]
404          [(A) certification of the conversion equipment by the federal Environmental Protection
405     Agency or by a state that has certification standards recognized by the board;]
406          [(B) testing the motor vehicle, before and after installation of the conversion
407     equipment, in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use
408     Highway Vehicles and Engines, using all fuel the motor vehicle is capable of using;]
409          [(C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
410     19-1-406, testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
411     emission standards applicable under Section 19-1-406; or]
412          [(D) any other test or standard recognized by board rule, made in accordance with Title
413     63G, Chapter 3, Utah Administrative Rulemaking Act; or]
414          [(ii) for purposes of special mobile equipment on which conversion equipment has
415     been installed, that the special mobile equipment's emissions of regulated pollutants, when
416     operating on a fuel listed in Subsection (2)(e)(i) or (ii), is less than the emissions were before
417     the installation of conversion equipment, as demonstrated by:]
418          [(A) certification of the conversion equipment by the federal Environmental Protection
419     Agency or by a state that has certification standards recognized by the board; or]
420          [(B) any other test or standard recognized by board rule, made in accordance with Title
421     63G, Chapter 3, Utah Administrative Rulemaking Act.]
422          [(l) "Special mobile equipment":]
423          [(i) means any mobile equipment or vehicle not designed or used primarily for the
424     transportation of persons or property; and]
425          [(ii) includes construction or maintenance equipment.]
426          (2) For the taxable years beginning on or after January 1, 2015, but beginning on or
427     before December 31, 2016, a claimant, estate, or trust may claim a nonrefundable tax credit
428     against tax otherwise due under this chapter in an amount equal to:
429          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
430     this state, the lesser of:
431          (A) $1,500; or
432          (B) 35% of the purchase price of the vehicle; or
433          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
434     registered in this state, $1,000;
435          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
436     registered in this state, the lesser of:
437          (i) $1,500; or
438          (ii) 35% of the purchase price of the vehicle;
439          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
440     this state, the lesser of:
441          (i) $750; or
442          (ii) 35% of the purchase price of the vehicle; and
443          [(d) 50% of the cost of equipment for conversion, if certified by the board, of a motor
444     vehicle registered in this state minus the amount of any clean fuel grant received, up to a
445     maximum tax credit of $1,500 per vehicle, if the motor vehicle:]
446          [(i) is to be fueled by propane, natural gas, or electricity;]
447          [(ii) is to be fueled by other fuel the board determines annually on or before July 1 to
448     be at least as effective in reducing air pollution as fuels under Subsection (2)(d)(i); or]
449          [(iii) will meet the federal clean fuel vehicle standards in the federal Clean Air Act
450     Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.;]
451          [(e) 50% of the cost of equipment for conversion, if certified by the board, of a special
452     mobile equipment engine minus the amount of any clean fuel grant received, up to a maximum
453     tax credit of $1,000 per special mobile equipment engine, if the special mobile equipment is to
454     be fueled by:]
455          [(i) propane, natural gas, or electricity; or]
456          [(ii) other fuel the board determines annually on or before July 1 to be:]
457          [(A) at least as effective in reducing air pollution as the fuels under Subsection
458     (2)(e)(i); or]
459          [(B) substantially more effective in reducing air pollution than the fuel for which the
460     engine was originally designed; and]
461          [(f)] (d) for a lease of a vehicle described in Subsection (2)(a), (b), or (c), an amount
462     equal to the product of:
463          (i) the amount of tax credit the claimant, estate, or trust would otherwise qualify to
464     claim under Subsection (2)(a), (b), or (c) had the claimant, estate, or trust purchased the
465     vehicle, except that the purchase price described in Subsection (2)(a)(i)(B), (2)(b)(ii), or
466     (2)(c)(ii) is considered to be the value of the vehicle at the beginning of the lease; and
467          (ii) a percentage calculated by:
468          (A) determining the difference between the value of the vehicle at the beginning of the
469     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
470     stated in the lease agreement; and
471          (B) dividing the difference determined under Subsection (2)[(f)](d)(ii)(A) by the value
472     of the vehicle at the beginning of the lease, as stated in the lease agreement.
473          (3) (a) The board shall:
474          (i) determine the amount of tax credit a claimant, estate, or trust is allowed under this
475     section; and
476          (ii) provide the claimant, estate, or trust with a written certification of the amount of
477     tax credit the claimant, estate, or trust is allowed under this section.
478          (b) A claimant, estate, or trust shall provide proof of the purchase or lease of an item
479     for which a tax credit is allowed under this section by:
480          (i) providing proof to the board in the form the board requires by rule;
481          (ii) receiving a written statement from the board acknowledging receipt of the proof;
482     and
483          (iii) retaining the written statement described in Subsection (3)(b)(ii).
484          (c) A claimant, estate, or trust shall retain the written certification described in
485     Subsection (3)(a)(ii).
486          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
487     only:
488          (a) against a tax owed under this chapter in the taxable year by the claimant, estate, or
489     trust;
490          (b) for the taxable year in which a vehicle described in Subsection (2)(a), (b), or (c) is
491     purchased[,] or a vehicle described in Subsection (2)(f) is leased[, or conversion equipment
492     described in Subsection (2)(d) or (e) is installed]; and
493          (c) once per vehicle.
494          (5) A claimant, estate, or trust may not assign a tax credit under this section to another
495     person.
496          (6) If the amount of a tax credit claimed by a claimant, estate, or trust under this
497     section exceeds the claimant's, estate's, or trust's tax liability under this chapter for a taxable
498     year, the amount of the tax credit exceeding the tax liability may be carried forward for a period
499     that does not exceed the next five taxable years.
500          (7) In accordance with any rules prescribed by the commission under Subsection (8),
501     the commission shall transfer at least annually from the General Fund into the Education Fund
502     the amount by which the amount of tax credit claimed under this section for a taxable year
503     exceeds $500,000.
504          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
505     commission may make rules for making a transfer from the General Fund into the Education
506     Fund as required by Subsection (7).
507          Section 8. Section 63I-2-219 is amended to read:
508          63I-2-219. Repeal dates -- Title 19.
509          (1) Subsection 19-1-403(2)(c)(i), the language that states "minus the amount of any tax
510     credit claimed under Section 59-7-605 or 59-10-1009" is repealed on January 1, 2017.
511          (2) Subsection 19-1-403(2)(c)(ii), the language that states "minus the amount of any
512     tax credit claimed under Section 59-7-605 or 59-10-1009" is repealed on January 1, 2017.
513          Section 9. Appropriation.
514          Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, for
515     the fiscal year beginning July 1, 2016, and ending June 30, 2017, the following sums of money
516     are appropriated from resources not otherwise appropriated, or reduced from amounts
517     previously appropriated, out of the funds or amounts indicated. These sums of money are in
518     addition to amounts previously appropriated for fiscal year 2017.
519          To the Department of Environmental Quality, Conversion to Alternative Fuel Grant
520     Program Fund
521               From General Fund, One-time
$150,000

522               Schedule of Programs:
523                    Conversion to Alternative Fuel Grant Program Fund     $150,000
524          The Legislature intends that the appropriation under this section be used by the Division
525     of Air Quality to provide grants to an individual who installs conversion equipment on an
526     eligible vehicle, as described by Title 19, Chapter 2, Part 3, Conversion to Alternative Fuel
527     Grant Program. The Legislature intends that, under Section 63J-1-603, appropriations under
528     this section not lapse at the close of fiscal year 2017.
529          Section 10. Effective date.
530           (1) Except as provided in Subsection (2), this bill takes effect on May 10, 2016.
531          (2) The amendments to Sections 59-7-605 and 59-10-1009 take effect for a taxable
532     year beginning on or after January 1, 2017.